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And at least eight more business leaders have signed a letter opposing Labour’s tax plans and warning that it would deter business and destroy jobs.

One of the 31 who have now signified their concerns is a donor who has loaned Labour £2 million and says no businessman in Britain would do so again while the party targets entrepreneurs.

Clothing tycoon Richard Caring, who also owns restaurants including The Ivy, accused Mr Balls of peddling ‘extreme socialist nonsense’ and said it would be ‘impossible’ for Labour to get funds from wealthy individuals in future.

Mr Balls announced on Saturday that Labour would raise the income tax rate from 45p to 50p in the pound for those earning more than £150,000.

Boris Johnson weighed in on the conflict by calling on the Chancellor to cut the top tax rate to 40p

He claimed it was justified to help eliminate the deficit, arguing that the top earners paid almost £10 billion more in tax in the three years when the 50p rate was in place than when the Government conducted its assessment of the tax back in 2012.

But the IFS said Mr Balls was basing the figures on Treasury projections rather than real returns and said there was ‘little evidence’ to suggest that a 50p rate would raise more.

The think-tank instead backed Chancellor George Osborne’s estimates that the top rate would bring in just £100 million extra – which the IFS called a ‘very small amount of money’.

The think-tank concluded: ‘The best evidence we have still suggests that raising the top rate of tax would raise little revenue and make, at best, a marginal contribution to reducing the budget deficit an incoming government would face after the next election.’

The number of bosses opposing Mr Balls’s plans yesterday hit 31.

They include Jo Shields, chairman of London’s Tech City.

She said: ‘This is not a pro-aspiration policy. We want people to aspire, to want to succeed, to create jobs and, yes, to be rewarded for their hard work and risk.’

Mr Caring, who said he expects Labour to pay back the outstanding £200,000 of a £2 million loan he gave the party in 2006, said the present regime ‘seem to be prepared to say anything to get a vote’.

‘When you look at the arithmetic it’s a nonsense,’ he added.

Mr Caring compared Mr Balls’s plans to those of French President Francois Hollande, who has had to backtrack after introducing a 75 per cent tax rate.

‘It’s the same deal. Extreme, extreme, socialist nonsense,’ he said.

He said it would now be ‘impossible’ for Labour to get loans from donors. He said of the tax plans: ‘I don’t think you’ll find any businessman in this country who will say it’s a smart idea, because it isn’t.’

Even the Financial Times, where Mr Balls once worked, denounces his plans this morning as ‘yet one more measure to punish enterprise’.

David Cameron insisted his own decision to cut the rate to 45p had been the best for the country.

‘Labour are now doing something that’s politically convenient but is very, very bad for our economy’, he told the Federation of Small Businesses.

London Mayor Boris Johnson even called for the Tories to return to a tax rate to 40p, the level at which it remained for almost all of the last Labour government.

But Ed Miliband yesterday defended the plans as ‘utterly fair and utterly reasonable’ because of a squeeze on living standards.

The Labour leader has previously stated publicly that a 50p rate should be permanent.

However, Shadow Business Secretary Chuka Umunna last night said it would only be a temporary measure. He added: ‘This isn’t some ideological expedition.’